Challenges Confronting Women in Micro and Small Enterprises in Addis Ababa, Ethiopia PDF

Challenges Confronting Women in Micro and Small
Enterprises in Addis Ababa, Ethiopia
Jemal Abagissa*
Abstract
This study was undertaken to explore factors that hinder women entrepreneurs
who are engaged in micro and small enterprises in Addis Ababa City. To this
effect the study provides information on the factors that deter women
entrepreneurs in starting and growing their businesses in Addis Ababa by
taking two sub-cities as a sample. 300 female respondents who were engaged
in micro and small enterprises were randomly selected from the two sub-cities.
Questionnaires with both close-ended and few open-ended questions were
prepared and distributed. The questionnaire consists of business related issues
such as the type of business, ownership types, sources of starting capital,
reasons of starting business, the profitability of business, problems encountered
at all stages of business. The data have been analyzed mainly using percentages
presented in tables. Lack of starting and working capital was clearly stated as a
major barrier to growth by many of the women entrepreneurs. While sources
from relatives were used to start business; ploughing back is reported as the
current source of finance used to run the business. The second and third largest
sources of current finance appear to be back the profit and credit from micro
finance. Moreover, the majority of women entrepreneurs have experienced
difficulties in finding and acquiring land and premises for production or
provision of services, as well as for selling purposes. Most run their businesses
from rented premises, but the relatively high rents poses critical problems for
them and can hinder their expansion and diversification.
Keywords: micro and small enterprises, women entrepreneurs, deterrents to

women entrepreneurs
__________________
*Jemal Abagissa (PhD), Addis Ababa University, College of Business and
Economics, Department of Public Administration and Development
Management, e-mail: keekoot@gmail.com
The Challenges of Women in Micro and Small Enterprises
1. INTRODUCTION
1.1 Background
Given lack of capacity in the public sector and lack of large scale private
enterprises to absorb new entrants into the labor force, the role to be played by
Micro and Small Scale Enterprises is critical for a country like Ethiopia.
According to the Ethiopian Central Statistical Authority (2004), almost 50% of

all new jobs created in Ethiopia are attributable to small businesses and
enterprises, and roughly 49% of new businesses that were operational between
1991 and 2003 were owned by women (quoted in Eshetu and Zeleke, 2008).
According to Aregash (2005), 98% of business firms in Ethiopia are micro and
small enterprises, out of which small enterprises represent 65% of all
businesses. More than half of all women entrepreneurs in Ethiopia often face
gender related challenges in establishing new businesses as well as operating or
expanding existing businesses (Amha and Admassie, 2004).
Despite these, there have been few studies concerning women entrepreneurs in
Ethiopia. According to Desta Solomon (2010), the limited data and information
available on women entrepreneurs have contributed to low knowledge and
awareness. Available surveys conducted often do not provide an adequate
overview nor do they show trends over time. Research on women
entrepreneurs and challenges confronting them are scanty despite large number
of women who are engaged in small and micro businesses and challenges that
confront them. Women entrepreneurs in Ethiopia suffer from gender
discrimination in society due to socio-cultural barriers, multiple
responsibilities, underdeveloped enterprise culture, inadequate support system
for businesses and underdeveloped markets and infrastructure (Desta Solomon,
2010).
These barriers provide the backcloth to women’s awareness and engagement

with business ownership, the type of business they engage in as business
owners, and where and how they practice their business. Consequently,
EJBE Vol. 3 No. 1/2013 Page 96

understanding this backcloth and the degree to which it shapes women’s

experience of enterprise is important (Goheer, 2003).
The Ethiopian MSE (micro and small enterprises) Development Strategy of

1997 had the objectives of facilitating growth and equitable development,
creating long-term jobs, strengthening cooperation amongst MSEs, establishing
a basis for growth to medium and large enterprises, and export promotion.
However, there is little evidence of specific, concrete and practical measures
taken by the government to address the barriers faced by women-owned MSEs
and no provisions have been made for facilitating growth-oriented women
entrepreneurs (ILO,2004). This means strategic policy instruments are lacking
to address the start-up and growth challenges of women in business (except the
simplification of license registration process). Even where a focal point on
women’s enterprise exists within the government, few resources are dedicated
to its mandate, showing the gap between government policy and its
implementation.
1.2 Objectives of the study

The overall objective of this research project is to explore issues related to
women’s entrepreneurship such as social and cultural deterrents, access to
financial support, access to markets and business premises and overall women
business management challenges in Addis Ababa.
The specific objectives are:

 to identify why women start micro and small businesses
 to assess the status of their business
 to identify types of support women received, if any
 to identify major constraints
 to explore possible ways and means that could foster women’s
entrepreneurship.

In doing so, this research will contribute to the existing small number of
studies on the challenges of women entrepreneurs in Ethiopia in general and in
Addis Ababa in particular.
The research seeks answers for the following questions:
1. What type of enterprises do women own and operate?
2. Why do they go into their businesses?
3. What challenges do they confront during and after the start of their
business?
4. What is to be done in order to enable women entrepreneurs to create
meaningful and sustainable employment opportunities and poverty
reduction?
1.3 Significance of the study
Women’s entrepreneurship needs to be studied for a number of reasons. The

first reason is that women’s entrepreneurship has been recognized very little
both in the literature and in practice despite large number of women engaged in
the sector.
There are successful women entrepreneurs who have created new jobs for
themselves and for others and hence have provided the society with alternative
solutions to unemployment.
Micro and Small Enterprises are particularly important for women since they
offer a more flexible, less restrictive form of employment and can be
undertaken by the skill they acquire thereby breaking the vicious cycle of low
entrepreneurship – low resources – poverty. It should essentially be one of the
primary policy concerns if women’s poverty and hence societal poverty is to be
alleviated.
The micro and small enterprise sector is also described as the natural home of
entrepreneurship. It has the potential to provide the ideal environment for
enabling entrepreneurs to optimally exercise their talents and to attain their
personal and professional goals.

The small business sector is also seen as important force for more equitable
income distribution; activate competition; exploiting niche markets; enhancing
productivity and technical change and, through the combination of all of these
measures, stimulating economic development.
Therefore, a strategy for private sector development cannot be successful in the

absence of adequate knowledge of the increasing role of women in the sector
and without addressing the different constraints that women face at different
stages in their growth and expansion.
With this in mind, this study intends to explore the conditions of micro and
small women entrepreneurs and the problems encountering them in Addis
Ababa City. Hence, it can add to the few studies on women entrepreneurs by
critically analyzing the environment of women entrepreneurs in the city and the
obstacles they face to survive.
To this effect, efforts are made to gather qualitative information and

quantitative data to profile women entrepreneurs as regards to the type of
business, sources of starting and operating capital, reasons for starting
business, problems encountered at all stages of business and many other
features.
1.4 Conceptual definitions

As a couple of concepts are combined together to address women enterprises in
this study, definitions are provided below.
Micro and Small Enterprises (MSEs)

Definitions of micro and small enterprises often vary from country to country
and, in some cases, even within countries depending on the government agency
or economic sector in question. Metrics used typically include the number of
employees, revenues, or fixed assets (Buame, 2000).

The World Bank definition of MSEs in Hallberg (1999) classified MSEs as a

heterogeneous group. They include a wide variety of businesses – hairdressing,
handicraft makers, food processing small shops, garment making, construction,
embroidery, restaurants and variety of trades and services that possess a wide
range of skills and operate in very different markets and social environments.
Their owners may or may not be poor. Some businesses are dynamic,
innovative, and growth-oriented; others are traditional ‘lifestyle’ or survivalist
enterprises that are satisfied to remain small.
In many countries, the number of employees is the most widely used criterion
in the definition of MSEs. The lower limit for small-scale enterprises is usually
set at five to ten workers and the upper limit at 50 to 100 workers (Hallberg,
1999). But since statistical definitions vary, it is very difficult to compare size
distributions across countries.
Specifying any number of employees to define MSEs is necessarily arbitrary

since the number of employees, viewed in isolation from the size of economy,
may be misleading. For example, according to Hallberg (1999), a 50-employee
firm in the US would be considered ‘smaller’ (relative to the size of the US
economy) than a 50-employee firm in Bolivia. Moreover, other characteristics
of the firm, such as the size of capital, the degree of informality or the level of
technology may matter more than the number of employees as a segmentation
factor.
Women’s entrepreneurship
Women’s entrepreneurship is essentially the creation by entrepreneurial

women of new ventures. Women entrepreneurs are women in business who
have recognized an opportunity and started, developed and grown a business
venture successfully. In other words, they have used creative, practical and
innovative approaches to convert an opportunity into commercial reality (Smile
Dzisi, 2008). They are actively involved in the operation of the enterprise as a
manager or administrator and generate employment for themselves and for
others.

Technically, a "women entrepreneur" is any woman who organizes and

manages any enterprise, especially a business, usually with considerable
initiative and risk taking.
But in essence, they involve in innovative and risky entrepreneurship under
certain social values and sex role regulations.
This means women entrepreneurs are simply women that participate in

entrepreneurial activities, who take the risks involved in combining resources
together in a unique way so as to take advantage of the opportunity identified
in their immediate environment through production of goods and services
(Okafor and Mordi, 2010).
However, it must not be assumed that all businesswomen are entrepreneurs,

just as not all businessmen are entrepreneurs. There is not necessarily anything
fundamentally entrepreneurial about some businesses, regardless of the gender
of the founder. Some businesses do not reflect the characteristics of
entrepreneurship: the seizing of profitable opportunity, the marshalling of
resources, innovation, and being achievement-oriented.
Women entrepreneurs are therefore women business owners whose ventures

reflect the characteristics of entrepreneurship and who have adopted and
implemented entrepreneurial activities and processes. These women have
recognized opportunities and have successfully marshaled the required
resources to exploit the opportunity. They have also driven and managed a
dynamic process involving change. Finally, they have created a new pattern of
activity which became a new wealth-creating venture with potential for growth.
The Addis Ababa women entrepreneurs association also briefly defines women
entrepreneurs as those women in Addis Ababa who own and run trade,
industry, handicraft, services and other business enterprises (Women
Entrepreneurs Association, 2002).

1.5 Statement of the problem

Women’s contribution to the socio-economic wellbeing of their families and
communities through their entrepreneurial activities has received little attention
from policy makers and researchers, and has been taken for granted (Buame
2000; Saffu and Takyiwaa Manu 2004). This has resulted in gross
underestimation and under-utilization of the women’s socio-economic
contribution and potential.
Particularly, women’s engagement in developing countries in entrepreneurship

and their experience in self-employment, their contribution to the creation of
new businesses and ability to create new jobs, and the consequent reduction in
unemployment and poverty are largely invisible in the literature (Allen and
Truman 1993; ILO 2000; Lerner et al. 1997; Still and Timms 1999).
For example, Saffu and Takyiwaa Manu (2004) found out that, to date, profiles
of women in small business are primarily limited to women in developed
countries. Furthermore, the ILO (2000) and OECD (2004) observed that while
the economic impact of women’s entrepreneurial activities is high, the world
still lacks a reliable definition of female entrepreneurship in developing
countries and a detailed assessment of their impact on their economies.
Importantly, the extent to which existing entrepreneurial theories and
knowledge derived from studies on women entrepreneurs in developed
countries are useful to women entrepreneurs in developing countries is not
known (Hisrich and Ozturk 1999; Lerner et al. 1997). Such knowledge is of
increasing importance, since women in developing countries are assuming a
greater role in enterprise creation and economic development as a result of
economic and societal changes worldwide (Lerner at al. 1997).
What do we know about female entrepreneurship in developing countries? Do

'stylized facts', in the developed world also apply to developing contexts? The
general question is whether the characteristics and role of female
entrepreneurship vary across countries at different stages of development
(Olomi and Rutashobya, 1999). Evidence shows that prevalence rates of
female entrepreneurship tend to be relatively higher in developing countries

than in developed countries. This has traditionally been explained by the fact
that in developing economies women face higher barriers to entry into the
formal labour market and have to resort to entrepreneurship as a way out of
unemployment and, often, out of poverty.
On the other hand, the OECD (2004) observed that the research that has been
carried out in the domain of women’s entrepreneurship has not come as a
response from the research community. Rather the research that has been
conducted in the field comes as reaction from different policy institutes
(European Union, ILO, UNIDO, the OECD and different national
governmental agencies) needing better information on these women in order to
support them, coupled with the intrinsic motivation emanating from individual
women researchers in the field.
The lack of attention given to women’s experience of entrepreneurship is

evidence of a wider problem of gender effects being omitted from mainstream
research studies into social phenomena. Carter (1993), for example, notes that
“historically women have been left off the small business research agenda or
made invisible by research practices or in other ways written out of the analysis
of self-employment”. Others have argued that the neglect of female
entrepreneurship is part of a much wider problem which has resulted in the
social sciences being structured in a manner which favours the male
experience.
The studies conducted so far are challenged for the view that entrepreneurship
is a gender-neutral activity (Baker et al, 1997). In reality, job creation and
employment is not gender neutral. Certain sectors and sources of employment
may be closed (either formally or informally) to women, and some support
services may be harder for women to access and obtain.
It is clear from the studies that women and men entrepreneurs do not operate in
the same manner, do not have the same opportunities and do not face the same
challenges. It is to be hoped that the studies focusing on women entrepreneurs

will influence future studies and surveys to be fully gender disaggregated and
that analysis will take full account of the gender dimension.
Thus, researchers of female entrepreneurship are still a long way from being
able to control factors so precisely. As Brush (1992) points out, this area has
been studied insufficiently to enable firm conclusions to be reached and more
empirical studies have to be undertaken.
The author of this study believes that the challenges facing women
entrepreneurs need to be studied based on empirical data because of the
importance of the subject as discussed earlier. By doing so the study sets out to
contribute to the limited studies on the subject.
2. LITERATURE REVIEW
2.1 Deterrents to Women Entrepreneurs

Studies show that both at prior to and post enterprise establishment, women
face various challenges unlike their male counterparts. For example, studies in
the 1980’s began to report unique barriers confronting women business
owners. Most significant factors include discrimination experienced by women
seeking venture capital and exclusion from financial business networks
(Hisrich and Brush, 1987). In the 1990s women business owners apparently
continued to confront significant gender-related obstacles (Buttner, 1993)
including difficulty in competing for government contracts, and lack of
information about where to get assistance (NFWBO, 1992). Women reported
that they had to work harder to prove their competence to suppliers and clients
(Buttner, 1993; Gould and Parzen, 1990), and to be taken seriously (Adamski,
1995). Others often underestimated women’s ability to start a venture and
discouraged them from “dreaming big” (Godfrey, 1992). Women still report
struggling with others’ (banks, government, suppliers and competitors)
diminishment of the significance of their enterprise: the “little business”
syndrome (Gay, 1997; Robertson, 1997). It was also reported that apart from
access to finance, women face challenges in net-work establishment, limited
access to markets and other resources due to socio-cultural deterrents. These
challenges are discussed in the subsequent sections.
2.2 Lack of Capital
A primary and continuing obstacle faced by women appears to be difficulty in

securing capital funding for new business ventures (Buttner and Rosen, 1992).
Riding and Swift (1990) concluded that financial conditions for women
business owners were less favorable than for men: women more often had to
pay higher interest rates, find more collateral, and provide a spouse’s co-
signature. Strauss (2000) claims that by 1994-95 in North America, statistics
made it clear that women were starting 40% of businesses and were still
receiving only 3-4% of venture capital funds. Of course, scholars like Buttner
(1993) contend that some women have been unprepared with the
comprehensive business plan demanded by the banks: rather than doing their
homework, they attributed their loan difficulties to gender discrimination.
Critics who attribute women’s failure to obtain necessary funds for start-up to
their lack of a proper business plan (Buttner and Rosen, 1992).Yet women
interviewed in qualitative studies tell stories about their business plans being
scrutinized more carefully and having to meet more special demands than
men’s (Gay, 1997; Robertson, 1997).
2.3 Networking
Another significant barrier for some owner-leaders reported in the literature

has been networking. Studies a decade old showed that few men business
owners included women in their close business networks (Gould and Parzen,
1990).
According to this view, the presence or absence of networks, such as relatives,

friends and access to or memberships in associations, plays a role in
influencing performances and the viability of a business venture. Women
entrepreneurs are embedded in different personal and social networks from
men; hence divisions and barriers that limit the reach and diversity of their
networks might have far-reaching consequences for business performance
(Aldrich, Reece, and Dubini, 1989).

Women business owners were often traditionally excluded from “old boy
networks”, were perceived to have more “affective” and less “instrumental”
motives in building relationships, and relied more on spouses for information
and support than on outside advisors such as bankers and lawyers (Buttner,
1993). Networks of contacts, important to both men and women business
owners, differed in content and size. Women’s networks tended to be
composed of women and were smaller than men’s networks (Aldrich, Reece,
and Dubini, 1989), which may be one reason for certain difficulties reported by
women in obtaining financing.
2.4 Role Problems – Balancing Family Responsibility with Business
A third key struggle for women business owners is related to balancing family
issues. Work-family conflict results from inter-role conflict caused by
incompatible or conflicting pressures from work and family domains, including
work-family interference (Parasuraman, Purohit, and Godshalk, 1996). Women
are more likely to have primary domestic responsibility and to have interrupted
careers, which create work-family conflict.
This refers to the concern that women business owners have about balancing
work and family commitments. Universally, family responsibility falls
primarily on women, and this can occur even when women are involved in
entrepreneurship. This may lead to time fragmentation, less chance of
entrepreneurial success or general career progression (Brush 1997). Women
experience ‘time poverty’ in attempting to deal with both commercial and
domestic work, leading to greater stress and difficulty (Still 1997).
Crampton and Mishra (1999), found that in addition to the demands of a career
and family, women also experience the additional behavioural expectation
placed on them by society – the burden of child rearing. Butler (2003) referred
to a study by Cole on British women entrepreneurs, which found out that many
of the respondents considered that there was a ‘distinct’ conflict between their
roles as wives, mothers and businesswomen. The study found out that
problems arose from the attitudes held by the respondents’ families, as well as
the business institutions they dealt with. These attitudes led to reduced support
and needed extra effort to overcome. Such attitudes tended to undermine the
respondents’ self-confidence and credibility.
2.5 Social and Cultural Constraints
According to Crampton and Mishra (1999), a major obstacle for women is the
presence of constraints imposed upon them by society, the family, and women
themselves. They see women still working in a society that often does not
accept them as powerful and influential business leaders. Relationships in
many societies are structured hierarchically, with women subordinate to men,
and having less power, opportunity and access to resources. Relations between
men and women in the family, the workplace or in the public sphere reflect
how society understands appropriate male and female characteristics and
behaviour. Growe and Montgomery (2001) find that society’s attitude towards
appropriate male and female roles is thus an obstacle that identifies women as
not task-oriented enough, too dependent on feedback and evaluations of others,
and lacking independence.
Negative attitudes and stereotypes created by society towards the career

woman constitute major challenges with the view that man’s job is more
important (Crampton and Mishra 1999). Although not all women fit this
stereotype, such an attitude breeds identifiable barriers to women’s
advancement. There are already attitudes that identify women as ‘lacking
career commitment, are not tough enough, don’t want to work long or unusual
hours, are too emotional, won’t relocate, lack quantitative and analytical skills
and have trouble making decisions’.
2.6 Limited access to market
Closely linked to women’s business status is the fact that the majority of
women operate in restricted locally-based markets which by their nature are
limited in size. Furthermore, this frequently leads to excessive competition and
under-pricing. Women engaged in business largely confine themselves to local
markets where access, mobility and networks are easier for them to negotiate

(Zewde & Associates, 2002).Women’s ability to penetrate markets outside of

their local area is affected not only by physical mobility issues, but also by the
types of businesses women engage in (UDEC,2002). Women’s locally made
products are increasingly in competition with a growing range of imported
goods coming into the market at all levels. Issues of quality and delivery are
the same for all micro-enterprises, but women face additional gender-based
issues concerning mobility – which in turn relate to their dual (household) and
triple(community) roles which constrain their time and determine whether it is
acceptable for them to travel outside of their communities. As the Tanzanian
research noted: “while male entrepreneurs can travel long distances to do
business, most women are inhibited by traditional roles, domestic
responsibilities and cultural values” (UDEC, 2002).
2.7 Working Premises
Women’s enterprises tend to operate from inappropriate premises. MSEs,

especially those operating in the micro level, face significant problems in
accessing appropriate and affordable premises. This is particularly so for
certain sectors such as food preparation and food processing businesses –
activities where regulations require that business accommodation should meet
specific hygiene standards, and in which women predominate. In 2000, an ILO
report on MSEs in Tanzania estimated that 60 per cent of informal enterprises
operated on the streets (ILO, 2000d). The issue of premises had both overt and
indirect gender issues for women per se. Women entrepreneurs, by the fact that
they dominate the informal economy, suffer more than men regarding
problems to do with appropriate business space and premises. More overtly,
customary practices in communities often prevent or deter women from
owning or leasing premises in their own right. For example, even where
women have resources to rent premises, some landlords are reluctant to make
legal agreements with the women without their families’ approval (see UDEC
2002, Zewde & Associates, 2002). Furthermore, women still experience
difficulties in obtaining ownership of and legal title to land and buildings, and
this can be seen in the low level of ownership of business premises by the
women in the WED study.

2.8 The Women Enterprise Sector in Ethiopia
The private sector in Ethiopia is dominated by the informal sector and small
and micro enterprises. Discussions on the private sector are inevitably
dominated by discussions about the MSE sector that includes all except
smallholding agriculture. According to Desta Solomon (2010), women account
for 60% of this sector. Women play an important role in the economy. Their
products and services contribute to GDP growth.
Hence, the MSE sector is important as it is a major source of employment

outside agriculture, it contributes significantly to GDP and it is often referred
to as the breeding ground for entrepreneurs.
The MSE sector is a very diverse type of business in Ethiopia. According to the
CSA urban informal sector sample survey (2003 and 2006), the sector includes
crafts and trade; street vending, cleaning, washing; service work, shop and
market, grain mills, furniture and metal products.
The sector is characterized by a low-skill labour force. According to the CSA

(1997) survey, 59% were illiterate and only 20% had received elementary
education, though this may have changed over the past decade or so.
Eshetu Bekele and Zeleke Worku (2008) argue that in spite of the enormous
importance of the micro, small and medium enterprises (MSME) sector to the
national economy with regards to job creation and the alleviation of abject
poverty among impoverished women in Ethiopia, the degree of recognition and
strategic support provided to the sector is grossly inadequate. Three successive
governments that were in power since 1960 have failed to improve the plight of
women entrepreneurs in Ethiopia. Although several economists have argued
that the promotion of women entrepreneurs is a prerequisite for overall
economic growth and the alleviation of poverty, women entrepreneurs in
Ethiopia have not been provided with meaningful assistance from the national
government of Ethiopia in terms of recognition, access to finance and skills

required for operating small businesses and enterprises profitably and

efficiently.
While one cannot deny the importance of large industrial and other enterprises
for the growth of the Ethiopian economy, there is ample evidence to suggest
that the labour absorptive capacity of the small business sector is high, the
average capital cost per job created is usually lower than in big business, and
its role in technical and other innovative activities is vital for many of the
challenges facing Ethiopia.
As is the case elsewhere, the individual characteristics of an entrepreneur, such

as sex, educational background, family influence, business environment, or
marital status often influence the opportunities of Ethiopian women
entrepreneurs.
Women and men generally have different degrees of access to opportunities

that affect their individual abilities to participate in economic activities.
Following from this, gender is in many cases a major determinant of one's
additional household obligations, which limit the amount of time one can
allocate to economic and other productive activities. Women carry a
disproportionate burden of household obligations. Women in comparison to
men often differentially experience access to and control over resources.
According to Desta Solomon (2010), women face significant constraints in

accessing resources due to socio-cultural factors that relegate women’s roles to
the domestic sphere and therefore denying them access to important resources.
He summarized such obstacles under the following points:
 Time poverty and restricted movement of women due to the assignment
of the reproductive role to women, high workload, and unpaid labour;
 Negative attitudes towards girls’ education, limited access and harmful
traditional practices such as early marriage and abduction are causes for
low attendance and high drop out of girls from school;
 Poor health of women due to limited access to health services, lack of
reproductive rights;

 Lack of decision making in the household and subordination;

 Limited employment opportunities and discriminatory practices in the
labour market.
Furthermore, according to Zewdie and Associates (2002), it is estimated that

the low representation of women entrepreneurs in the small-scale
manufacturing sector(as compared to micro enterprises) could be attributed to a
number of factors such as low levels of education and lack of opportunities for
training for women; heavy household chores that leave women less time to
devote to their businesses; lack of contact with and exposure to the business
world and meagre financial and human capital at the disposal of the women
concerned.
For many of the reasons stated above, experience shows that in Ethiopia there
is a link between complex gender-specific constraints and the types of
economic activities which urban and rural women tend to be engaged in. This
in turn appears to have a number of implications for women’s enterprise
development. Some of the specific constraints include: limited access to and
control over productive resources, limited access to business skills and
experience and limited market-opportunities for their business because of their
dual roles.
Socio cultural problems play their part in shaping of female businesses. In this
regard the Ethiopian socio-cultural environment is rather complex as the
population is composed of more than 80 different ethnic groups with varied
attitudes and traditional beliefs towards women. Major constraints on women’s
participation in developmental activity lie in the socio-cultural belief of the
society, particularly as it governs marriage and property ownership by women
in particular, and also in the patriarchal social system of the society in general.
These factors entail a lower level of women’s involvement in the areas of some
formal education, politics and decision-making both at household and public
levels.

In some areas, women are not allowed to work on the land due to the
superstition that the land will not yield crops if women touch the plough (e.g.
Amhara, Tigray). In other communities, however, they play major roles in food
production, such as in the Gurage culture. In certain communities women are
allowed to inherit property, while in others the brother-in-law inherits widows,
their children and livestock. Due to these and other practices, women find it
difficult to break away from traditions and behave independently. This
constitutes a major impediment to enterprise development by women in
Ethiopia (Alemtsehay, 1998). A study conducted on the Afar women
entrepreneurs indicates that, although a woman has equal access to livestock
and household articles, practically speaking, she does not have any say over the
property without the order and consent of a senior/elder female relative.
A study titled “Gender and Cross-cultural Dynamics in Ethiopia”, by Hadera

Tesfaye (quoted in Zewdie and Associates, 2002) was conducted across 11
ethnic groups residing in about 94 per cent of the country, and it confirmed that
Ethiopia is a male-dominated, patriarchal and tradition-oriented society.
In some parts of the country, women’s mobility is limited by culture. As a

result, women can engage only in activities that do not take them away from
home. They may engage in the commercial production of poultry, goat and
sheep rearing, but when they start rearing larger animals, such as fattening
oxen, men immediately take over. The marketing aspect of even the smaller
domestic animals is, sometimes, handled by their male folk. This is of course,
mostly true in rural areas of the country. Among urban women, there is a
strong connection between a woman's access to independent income and her
control over the resources of the household. A recent study (AEMFI, 2002) on
the impact of micro-finance confirms that the ability to earn and control
income appears to be one of the most powerful determinants of a woman's
status and level of decision-making in the family.
According to ILO (2003), some of the women pointed out that due to their
upbringing or their background (coming from conservative families), their
level of education and lack of exposure, seem to have led to lack of skills that

require aggressive negotiation, or in having meetings outside of normal

business hours. Women reported that the people they did business with did not
take them seriously, saw them as a higher risk, did not believe they could pay
their way, or simply felt that as women they should not be in business and
therefore not be assisted.
Women entrepreneurs generally lack occupational experience compared to

their male counterparts due to lack of education and prior business experience.
This limits women’s mobility because of cultural attitudes. As a result, women

can engage only in activities that do not take them away from home. Many
women operate smaller businesses, and do so in localized markets and in
feminized sectors, which are under severe market pressure from competition.
3. RESEARH METHODOLOGY
The target populations of this study are women entrepreneurs in Addis Ababa
who are engaged in micro and small businesses. Since the population is
estimated to be large, the researcher selected a sample. According to the report
of the Addis Ababa Trade and Industry Development Bureau, there were
179,000 micro and small enterprises in 2007(Addis Ababa, Quarterly
Magazine, Vol. 4, No.1, 2007).
But this number is not disaggregated into gender and other variables. This is
consistent with the situations elsewhere. The lack of up-to-date and
comprehensive data on micro and small enterprises is a universal problem, to a
greater or lesser extent, throughout the world (World Bank, 2000; Liedholm,
2001; Kantor, 2001; and Goheer, 2003). It is compounded in many African
countries where, largely because of lack of resources, there are few national
formal data collection structures in place. Even when business registration
systems are in place, they are not necessarily monitored and maintained on a
regular basis, making it difficult to gain an understanding of the true nature and
extent of the MSE sector (JUDAI, 2002 and UDEC, 2002).

The researcher could not find uptodate number of women engaged in micro
and small enterprises in the two sub cities. Thus, the researcher had only one
option to approach the target group. Target groups were contacted from their
business premises. Before they responded to the question, the researcher
verified if their businesses fall within the definition of Ethiopian micro and
small enterprise category.
Moreover, samples were selected based on the researcher’s capacity and

sample manageability. Thus, a random sampling method is used and data were
collected in 2008 through survey questionnaires.
The study examines the working status, reasons for being in business and the
types of businesses involved. It also examines the difficulties experienced in
starting up and maintaining the businesses, the opportunities available to
facilitate their business, spouse and family support if there is any, the
characteristics of the entrepreneurs and future planning. Educational status and
any type of training received were also included in the survey.
3.1 Sampling
Addis Ketema and Gulele subcities (administrative areas) were selected as the
study areas and a sample of 300 women (150 from each sub-city) were
selected. The two sub-cities account for 20% of the total ten sub-cities in Addis
Ababa. Then respondents were selected at their business premises based on a
random sampling. Data were collected by turning around in the sub-city
quarters where ever women in small businesses were located.
The two sub-cities were selected purposely. Addis Ketema is supposed to be

the centre of business of the city and Gulele is characterized by mixed land use.
By so doing, the study originally assumed there could be discrepancy between
the sub-cities as regards to women entrepreneurs.

3.2 Data collection instruments
For the purpose of this study, questionnaires with both close-ended and few
open-ended questions were prepared and distributed. Open-ended questions
were included to solicit information on issues that cannot be sufficiently
addressed by simple close-ended questions.
The questionnaire has two parts. The first part of the questionnaire consists of
individual level basic information such as age, birth place, marital status, level
of education, place of business (kebele) and name of the business.
Part two consists of business related issues. This part is further divided into
major components such as the type of business, ownership types, sources of
starting capital, reasons for starting business, the profitability of the business,
problems encountered at all stages of the business, etc.
Generally, the questionnaire contains a broad range of information on women

entrepreneurs and women-operated enterprises, and on the problems and
opportunities facing women entrepreneurs. Thus, this research will contribute
to the understanding and knowledge of the experiences of women in small and
micro businesses in Addis Ababa.
It is to be noted that some of the short and open ended questions included in
the questionnaire are analyzed in this study in the appropriate places using
paraphrasing and narrating. Useful secondary sources of data on women
entrepreneurs were also consulted and used wherever appropriate.
3.3 Data Collection

Before the principal data collection was undertaken, a pilot -test was conducted
on 30 women entrepreneurs (15 from each sub-city).
The main objective of the pilot study was to make sure respondents understand
the questions. Based on the feedback from the pilot study, a better set of
questionnaire has been developed and distributed to the respondents.
The feedback received from the pilot testing includes:

 that the questionnaire is comprehensive because it included most

aspects of business issues of micro and small businesses
 the questionnaires addressed most problems encountering women
engaged in micro and small businesses
 it was also reported that filling in the questionnaire is time consuming
because of the large number of questions.
Based on these feedbacks, some of the questions were deleted, some were
reduced and still others were modified and related questions were merged.
After feedbacks were solicited through pilot-testing, principal data collection
was conducted from the primary sources.
The researcher also consulted some secondary sources which helped him in
acquiring useful insights both theoretically and empirically.
3.4 Data Analysis

The data have been analyzed mainly using percentages in tables except in few
cases where “yes or no” responses and ranking methods were employed.
The variables were analyzed in descriptive and narrative style because of their
qualitative nature.
4. MAJOR FINDINGS AND DISCUSSION
4.1 Respondents’ Profile

Respondents’ profile, such as age, marital status, educational background and
others have been presented in the following tables.
Table 4.1: Age Category

Category No. %
Less than 20 15 5
20-39 205 68.33
40-49 65 21.6
50-59 5 1.6
Above 60 10 3.33
Total 300 100

The predominance of women entrepreneurs in the age group 20 to 39 could be

due to a number of things: lack of alternative employment opportunities in the
formal employment sectors; the need to generate income either as the primary
earner for the household or in a supplementary role, or simply the wish to own
their own business.
Table 4.2: Marital Status
Marital status No. %
Married 125 41.6
Divorced 30 10
Separated 25 8.33
Single 100 33.33
Widowed 20 6.66
Total 300 100
The table shows that 41.6% of women entrepreneurs are married. It is clear that
the married women are engaged in double responsibility of family care in
addition to running their business. In addition to common motivations that
women in MSEs share, it is believed that married women have additional
motives of supplementing their husbands’ income by engaging in business.
This fact is consistent with the study undertaken by WED in three African
countries. According to this report, the majority (64 per cent) of the women
interviewed in the WED Study were married – 69 per cent in Tanzania, 63 per
cent in Ethiopia and 60 per cent in Zambia – and most had been married before
starting a business( ILO, 2004).
The involvement of single women in business is also significant which

accounts for more than 33 per cent. The increasing number of single women in
micro enterprises may be a result of the acute problem of unemployment in the
country, with young women resorting to self-employment.

Table 4.3: Educational Status

Grades completed No. %
Primary(grade 1-8 ) 75 25
Secondary(grade 9-12) 150 50
Vocational( 10+) 50 16.6
Others* 25 8.3
Total 300 100
*refers to grade 12 complete with further short term training.
Half of the women interviewed have only completed secondary education. This
shows that either they did not complete their secondary education or those who
completed did not pass the national exam that could allow them to join
universities and colleges.
Vocational education, unlike formal education, is expected to have profound
impact on the performance of Micro and Small Enterprises (MSEs). But, the
results of the survey indicate that a relatively small proportion (16.6 per cent)
of the MSE owners had vocational training.
Low educational levels are characteristic of the women who operate survival
level enterprises, especially in the slum areas of the city. Unless interventions
are directed at young women and school-leaving girls, the existing,
traditionally women-operated enterprises will not move up or graduate to the
upper end of MSEs. Young people, owing to their better education, can be
guided, retrained and redirected so as to become more productive and growth-
oriented entrepreneurs. The government should therefore identify and motivate
young girls coming out of school and provide the appropriate facilities to help
transform them into a new breed of women entrepreneurs. Otherwise, this
unfavorable picture may aggravate the already chronic social, economic and
health problems of the vulnerable young women.
4.2 Business Related Issues and Problems

This section constitutes the analytical part of the research project. Thus, it
consists of issues such as the type of business, ownership types, sources of
starting capital, reasons for starting business, the profitability of business,

problems encountered at all stages of business, etc. The key questions that the
research raised are examined in this section.
Table 4.4: Categories of Business Enterprises

Type of Arada sub-city Addis ketema sub-city
business
No. % No. %
Micro 110 68 70 50
Small 50 32 70 50
Total 160 100 140 100
The table indicates that the majority of women are engaged in micro
enterprises. Arada sub-city is a champion in this regard with 68% of its women
engaged in micro enterprises. This indicates that women usually start their
business from micro levels because of lack of capacity.
It seems also that they choose small enterprises as there is an easy entry and
exit into this economic activity and these enterprises need simple technology,
requiring few skills and education. Most women do not have the capacity to
start small and medium enterprises due to lack of financial, managerial and
technical capacity.
The main reasons behind this are that women are seen to have “inappropriate
attitudes” to business (UDEC, 2002, p. xiii), are “risk averse”, and not
“growth- oriented” business owners (Zewde & Associates, 2002). Women are
seen to have limited business vision with their main aim being to earn an
income – frequently labelled as “supplementary” or “pin money” – and not to
build substantial businesses.

Table 4.5: Respondents’ Status before Starting Business

Status before starting No. %
business
Student 80 26.6
Unemployed 85 28.3
Employed 30 10
Housewife 105 35
Total 300 100
More than a third of the respondents had been housewives shortly before
adopting entrepreneurship; and this could be explained as an effort to support
or supplement their family income. The second and third largest groups were
those who were unemployed and who were students prior to the start of
business.
Table 4.6: Initiating Persons/ Conditions for Entrepreneurship

Initiated by No. %
Myself started from 110 36.66
scratch
My husband 85 28.33
Other family members 20 6.66
Friends 30 10
Took over already 35 11.66
existing business
Bought existing business 20 6.66
Total 300 100
The table indicates that most of the women interviewed had initiated the
business idea by themselves followed by their husbands’ initiatives. This
implies that most respondents are married and have family whom they have to
support by earning income. The initiation of business ideas by husbands also
supports this argument because many husbands recommend their wives to
engage in businesses that can bring extra income to the family.

There are also some husbands who prefer their wives to engage in some kind
of business to avoid the problem of staying at home if they are uneducated or
formally unemployed.
Table 4.7: Sectors of Business

Sectors No. %
Trade* 165 55
Production 30 10
Service 105 35
Total 300 100
*In this study:

 Trade is understood as buying and selling of commodities and
merchandise.
 Services are understood as intangible business activities such as
hairdressing, catering services, etc.
 Production is defined as the process of transforming inputs into outputs
of goods, mostly by manufacturing processes.
The table shows that the largest group of women (55 per cent) operated
enterprises in the trade, 35% in the service sector, followed by a third in the
production sector which stood far behind the other two sectors. This is
consistent with the literature. Tinker (1990) and McDade and Spring (1998)
found out that enterprises operated by these women cluster mainly around
SMEs in the trades and services. This shows that trade and service sectors are
easier for women to involve in than manufacturing and technical sector.
Table 4.8: Status of Working Place/Premise

Answer Number %
Rented 225 85
Their own 75 15
Total 300 100

The working place is one of the main components that are needed for a
successful and sustainable growth of enterprises because it is essential in
creating access to resources and the necessary markets. Most of the women do
not have their own working premises.
Few of the women owned their premises, but the majority were renting them.
Table 4.9: Number and Types of Persons Involved in the Established

Enterprises
Female Male Total
Type of No. % No. No. %
Involvement
Full time 500 40.6 340 27.31 840 67.47
Part-time 90 7.24 25 2 115 9.24
Paid family 10 .08 0 0 10 .08
member
Unpaid family 170 13.65 110 8.84 280 22.44
member
Total 770 61.57 475 38.15 1245 100
The table indicates that the majority of women enterprises employ full time
workers in their businesses followed by unpaid family members. This indicates
that the sector plays an important role in employment creation for others,
income generation and poverty reduction thereof.
Table 4.10: Reasons for Starting Entrepreneurship

Reasons No. %
Family tradition 25 8.33
To be self-employed 175 58.33
Brings high income 30 10
Small investment is 50 16.66
required
Lack of alternatives 20 6.66
Total 300 100

Of the women entrepreneurs surveyed, many of them gave clear statements

about what their critical motivating factors were. These statements have been
grouped under five headings, as shown in the table above. The women seem to
have been particularly motivated by the desire to generate income and support
their families, as well as seeing the business as a vehicle for being independent.
On the other hand, an impact study recently conducted on the activities of four
micro- institutions (two urban and two rural) operating in two regional states,
revealed that the micro-enterprises run by women were generally started as a
result of:
 unsatisfied household subsistence needs (such as food, clothes and
education of children);
 girls dropping out of school and being unable to find wage
employment;
 family pressures on girls to earn their own living;
 credit facilities being directly offered to women on their doorsteps.
The study emphasized that the type and nature of the enterprises in which
women entrepreneurs were engaged were often directly linked to their initial
motivation for starting an enterprise. Such enterprises, run by women, are not
generally growth-oriented and remain at survival level.
Table 4.11: Responses from Spouses and Other Family Members to the
Establishment of Business Enterprises
Category of Category of No. %
Persons responses
Spouse Supportive 150 75
Indifferent 10 5
Negative 40 20
Total 200 100
Supportive 200 66.6
Other family Indifferent 25 8.33
members Negative 75 25
Total 300 100

The table shows that 40 women reported that their spouses had reacted
negatively, 150 said they are supportive and 10 said they are indifferent.
Regarding other family members’ support, (200) women reported they get their
support, 25 and 75 reported the reaction as indifferent and negative
respectively. The data generally shows that the majority of the family appear to
be supportive. The research was interested to see whether this support
translated into practical contributions to household chores and childcare. The
survey did not probe this in any great detail, but asked the women whether they
received such practical help – more than half per cent of the women said they
did.
Women who start small enterprises directly themselves because they have the
necessary resources, sometimes face opposition from their husbands or other
family members, especially if the type of activity is traditionally not thought to
be a “respectable” business for women.
Table 4.12: Sources of Start-up Capital

Sources No. %
Personal saving 70 23.33
Household 20 6.66
Borrowed from relatives 45 15
Micro finance 70 23.33
Institutions
Equb 30 10
Assistance from friends/ 25 8.33
relatives
Inheritance 30 10
Borrowed from bank 10 3.33
Total 300 100
As has been indicated earlier, the credit delivery modalities of the MFIs and
the lending terms of the banks do not always meet the needs of both the small

and microenterprise categories. Therefore, it is not surprising that the women

entrepreneurs complain about the limited loan provision of these agencies.
Personal savings account for 23.33 per cent of women entrepreneurs' sources
of startup capital. The other largest and second largest sources of start-up
capital appear to be micro institutions and assistance of relatives (23.33 per
cent and 15% respectively.
Of those women entrepreneurs who had access to bank loans for start-up
capital, their share is 3.33 per cent. The bank loans for women entrepreneurs’
starting up micro-enterprises came from both formal banks, while those women
who established small-scale enterprises obtained credit from formal
commercial banks only. This latter group of women entrepreneurs reported that
they did not consider MFIs relevant for their purposes, which is likely to be
due to the smaller loan sizes offered by the MFIs.
Table 4.13: Major Constraints of the Establishment of Business Enterprise

Constraints Ranking
Working space 2
Capital 1
Support that would build my confidence 5
Appropriately skilled labour 4
Obtaining the license 7
Access to raw materials 6
Government rules and regulations 8
Lack of credit facilities 3
Others 9
Lack of working capital was clearly stated as a major barrier to growth by

many of the women entrepreneurs, so it was interesting to hear how the women
actually funded their businesses. When asked this question, many of the
women stated that the major source of finance for their businesses came from

the proceeds of the businesses which are ploughed back for expansion of the
enterprise, followed by a back profit and MFIs.
The two most notable constraints were lack of appropriate working space (the
problem mentioned most frequently by respondents) and lack of credit
facilities ranking second and third respectively due to lack of space.
5. CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
The contribution of women entrepreneurs in small and micro enterprises to
employment creation and economic development cannot be underestimated.
For example, women are increasingly contributing to meeting household
economic needs, a role that was traditionally left to men in many societies.
Hence, women’s entrepreneurship is important for the achievement of broader
development objectives particularly for growth with equity and alleviation of
poverty.
Women entrepreneurs are motivated by various factors to start their own

enterprises. The stimuli for individuals to create a business include factors such
as lack of job in the formal sector, wanting to be their own bosses and job
satisfaction. These reasons are common to both males and females; however,
there are clearly defined sets of motivations that consistently emerge in the
case of women making the decision to begin a business. These are autonomy,
control over career, hitting the glass ceiling in employment, and the need for
flexible work patterns to accommodate family arrangements.
However, the path to start and grow women owned enterprises is bumpy due to
various factors. Various barriers are identified by women entrepreneurs for
business start-up and growth. These include access to finance, access to
markets, access to networks, access to premises and access to education. It is
likely that many of these problems apply to both women and men in the micro
and small enterprises sector, and that they are a common feature of low-cost,
easy entry types of business. However the research revealed that there
appeared to be some underlying gender issues that specifically affect women.

For example, the social and practical family responsibilities that come with
marriage and motherhood mean that women have less time and opportunity to
do business unlike their male counterparts.
Therefore, for understanding women enterprises and the challenges they face in
setting up and growing a business, it is important to take cultural factors into
account. Social expectations, norms, attitudes, and values concerning the
typical role for women, family traditions, all have the potential to act as
barriers for women’s expectations, entrepreneurial choices and outcomes.
Cultural norms determining the extent of and roles for female entrepreneurship
include the general value a society attributes to female employment business
engagement. Besides cultural factors, the overall institutional and policy
contexts play important roles for women enterprises.
Despites these challenges, review of literature indicated that there are concerns
that female entrepreneurship and the effects of gender on small business
management are neglected areas of study. Research on female entrepreneurship
has received proportionally less attention than research concerning
entrepreneurship in general, which frequently is gender-neutral or concentrates
on male norms and practices.
The same is true in Ethiopia. Limited data and information available on

women entrepreneurs have contributed to low knowledge and awareness.
Available surveys conducted often do not provide an adequate overview.
Research on women entrepreneurs and challenges confronting them are scanty
despite large number of women who are engaged in small and micro
businesses and challenges confronting them. Women entrepreneurs in Ethiopia
suffer from gender discrimination in society due to socio-cultural barriers,
multiple responsibilities, underdeveloped enterprise culture, inadequate support
system for businesses and underdeveloped markets and infrastructure.
With this background, this study attempted to explore the situation of women
in micro and small enterprises in terms of availability of funds to start and

operate their businesses, working premises, family support, access to market

and various challenges encountered and opportunities exploited. To this effect,
the research has provided a range of information on women entrepreneurs and
women-operated enterprises, and on the problems and opportunities facing
women entrepreneurs in Addis Ababa. The research has also contributed to the
understanding and knowledge of the experiences of women’s business growth,
the business support framework, and the broader environment within which
women’s businesses operate in Addis Ababa.
Of the women entrepreneurs surveyed, many of them gave clear statements

about what their critical motivating factors were. These women seem to have
been particularly motivated by the desire to generate income and support for
their families, as well as seeing the business as a vehicle for being independent.
The fact that most women start their business due to poor household income
shows that the major reason is a push factor as discussed in the literature.
Lack of capital was clearly stated as a major barrier to growth by many of the
women entrepreneurs, so it was interesting to hear how the women actually
funded their businesses. While sources from relatives were used to start
business; ploughing back is reported as the current source of finance used to
run the business; accounting for higher per cent. The second and third largest
sources of current finance appear to be back the profit and credit from micro
finance.
Moreover, the majority of women entrepreneurs have experienced difficulties

in finding and acquiring land and premises for production or provision of
services, as well as for selling purposes. Most run their businesses from rented
premises, but the relatively high rents pose critical problems for them and can
hinder their expansion and diversification.
It can be concluded that the type of challenges that confronted women

entrepreneurs in Addis Ababa are mostly consistent with those identified in the
literature and with the issues raised in research questions. However, the study
also shows that despite all of these, many women are running successful

businesses that generate income not only for the owners but also for those
whom they have employed. In this way they help to sustain their own families,
as well as those of their employees. Reasons include increasing support from
spouses and family members, strong determination of women themselves and
easy entry into the market. Thus, many respondents reported that they will
either continue to operate the same business or expand it in the years to come.
5.2 Recommendations
Creating employment for Ethiopian women is a major issue keeping in mind

insufficient opportunities in the formal sector. Women entrepreneurs in
Ethiopia can play an important role for the MSE development provided the
government takes the necessary steps to mitigate the problems and hardships
faced by them. The purpose of microenterprise development in such contexts is
not only to increase women's access to income but also to motivate a process of
empowerment for women through which they can gain power and status in the
household, market, and community.
Based on the findings of this study, the following recommendations are made
so that where possible, remedial actions can be taken with a view to assist
small businesses and enterprises operated by women in Ethiopia.
The national government should alleviate these challenges by introducing an

enabling macroeconomic environment, and by using legislative tools,
awareness campaigns and education with a view to remove chronic barriers to
economic growth and to minimize the incidence of gender-related
discrimination against women entrepreneurs.
Enabling Environment
The research showed that there appears to be an adequate level of awareness

among women entrepreneurs about government policies that concern their
businesses. According to the survey, most of the women entrepreneurs think
that changes are required to create a more conducive environment for their

respective operations and to facilitate the growth of their enterprises. The

existing legislation acknowledges the importance of MSEs but there is little
endeavor to translate this into concrete measures to facilitate the growth of
women entrepreneurship.
It is very important that the regulatory framework that affects business

activities in general and those influencing women entrepreneurs in particular,
be revised regularly to create a more conducive and enabling environment. For
instance, the tax system needs proper attention as it concerns women
entrepreneurs over the existing method of the tax levy assessment, which is
based on subjective estimates and which does not take account of the ability of
the enterprises to meet the tax demands.
Credit Facilities
The city government could play important roles, by soliciting funds for on-
lending to women entrepreneurs and channeling these through the existing
financial institutions. In a situation of apparent market failure, the government
could create a credit guarantee programme for women entrepreneurs by
mobilizing resources from different sources. This arrangement will help in
overcoming the collateral requirements faced by operators in the informal
economy and MSE sectors in general, and women entrepreneurs in particular.
Accesses to Land and Premises
The problem of working space is another area where women entrepreneurs

need support. Women entrepreneurs are experiencing difficulties in meeting
the high level of rents, and most of them do not own their own premises. The
government could establish and/or construct production and marketing sheds
for women entrepreneurs in suitable locations. In order to encourage private
investors to engage in the construction of suitable premises for women
entrepreneurs, the government could provide incentives such as tax relief and
making available plots of lease free land for productive purposes.

The Government could establish common facility centres where women

entrepreneurs could undertake certain specific activities under one roof. This
mechanism has the advantage of reducing costs for the individual women
entrepreneurs and bringing together specialized services in a more cost-
effective manner.
Training and Advice
Women who operate in the micro-enterprise sector tend to have lower

education, are less formal, have little prior work experience, and are initially
driven into self-employment by economic necessity.
Thus, to encourage women entrepreneurs into self-employment, there is a clear

need to widen access to business start up training and advice. In practice this
implies a wide range of start up support services which encourage women into
business and help them stay in business and grow. Women enter business from
a wide variety of backgrounds with a range of experiences. The training and
advice should not be limited to the business startup but should include skills
and capacity on how to carry on the business in a sustainable manner.
Training courses should focus on specific problems than focusing on very

general theoretical assumptions. To this effect, training need assessment must
be undertaken to identify real gaps and post training assessment should also be
undertaken to track the impact of the training.
Training programs should give attention to skills-based training for enhancing

self-employment in the MSME sector. Furthermore, on-the-job training
opportunities are critically important for the survival of businesses operated by
women.

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Challenges Confronting Women in Micro and Small

Enterprises in Addis Ababa, Ethiopia

Keywords: micro and small enterprises, women entrepreneurs, deterrents to

According to the Ethiopian Central Statistical Authority (2004), almost 50% of

These barriers provide the backcloth to women’s awareness and engagement

EJBE Vol. 3 No. 1/2013 Page 96

understanding this backcloth and the degree to which it shapes women’s

The Ethiopian MSE (micro and small enterprises) Development Strategy of

1.2 Objectives of the study

The specific objectives are:

EJBE Vol. 3 No. 1/2013 Page 97

1.3 Significance of the study

Women’s entrepreneurship needs to be studied for a number of reasons. The

EJBE Vol. 3 No. 1/2013 Page 98

Therefore, a strategy for private sector development cannot be successful in the

To this effect, efforts are made to gather qualitative information and

1.4 Conceptual definitions

Micro and Small Enterprises (MSEs)

EJBE Vol. 3 No. 1/2013 Page 99

The World Bank definition of MSEs in Hallberg (1999) classified MSEs as a

Specifying any number of employees to define MSEs is necessarily arbitrary

Women’s entrepreneurship is essentially the creation by entrepreneurial

EJBE Vol. 3 No. 1/2013 Page 100

Technically, a "women entrepreneur" is any woman who organizes and

This means women entrepreneurs are simply women that participate in

However, it must not be assumed that all businesswomen are entrepreneurs,

Women entrepreneurs are therefore women business owners whose ventures

EJBE Vol. 3 No. 1/2013 Page 101

1.5 Statement of the problem

Particularly, women’s engagement in developing countries in entrepreneurship

What do we know about female entrepreneurship in developing countries? Do

EJBE Vol. 3 No. 1/2013 Page 102

The lack of attention given to women’s experience of entrepreneurship is

EJBE Vol. 3 No. 1/2013 Page 103

2.1 Deterrents to Women Entrepreneurs

2.2 Lack of Capital

A primary and continuing obstacle faced by women appears to be difficulty in

Another significant barrier for some owner-leaders reported in the literature

According to this view, the presence or absence of networks, such as relatives,

EJBE Vol. 3 No. 1/2013 Page 105

2.4 Role Problems – Balancing Family Responsibility with Business

2.5 Social and Cultural Constraints

Negative attitudes and stereotypes created by society towards the career

2.6 Limited access to market

EJBE Vol. 3 No. 1/2013 Page 107

(Zewde & Associates, 2002).Women’s ability to penetrate markets outside of

2.7 Working Premises

Women’s enterprises tend to operate from inappropriate premises. MSEs,

EJBE Vol. 3 No. 1/2013 Page 108

2.8 The Women Enterprise Sector in Ethiopia

Hence, the MSE sector is important as it is a major source of employment

The sector is characterized by a low-skill labour force. According to the CSA

EJBE Vol. 3 No. 1/2013 Page 109

required for operating small businesses and enterprises profitably and

As is the case elsewhere, the individual characteristics of an entrepreneur, such

Women and men generally have different degrees of access to opportunities

According to Desta Solomon (2010), women face significant constraints in

EJBE Vol. 3 No. 1/2013 Page 110

 Lack of decision making in the household and subordination;

Furthermore, according to Zewdie and Associates (2002), it is estimated that

EJBE Vol. 3 No. 1/2013 Page 111

A study titled “Gender and Cross-cultural Dynamics in Ethiopia”, by Hadera

In some parts of the country, women’s mobility is limited by culture. As a